At 790, nothing from an immediate term TRADE perspective will have changed other than going straight up to the top of a trade-able range. The Bear Market’s intermediate TREND line remains overhead (solid red line) at 830.
I was first given the gun to manage a “carve-out” of a hedge fund in the year 2000. In the Baby Bear market of 2000-2003 the average trough-to-peak squeeze rally in stocks was just north of +17%. The 2009 SP500 closing trough price was 676 (we got bullish for a TRADE there); if we see that 790 print, that will have been a +16.9% move, trough-to-peak. I have seen this movie before.
TRADE and tread carefully as we push to the topside of the range. All of the Bulls have been Bearish, and you can bet your Madoff that they’ll get sucked into this at that immediate term top.
Keith R. McCullough
CEO & Chief Investment Officer